Barnier’s statement that the EU ‘is prepared to offer Britain a partnership such as there never has been with any other third country’ left the EUR/GBP exchange rate in a sharp slump, as markets rapidly reassessed the odds of a no deal Brexit.

However, as economists at RBC noted:

‘We, however, stress that even if there is a deal struck between the EU and the UK, an even tougher hurdle will be to get any deal through the UK House of Commons – which at present seems to have moved down the ladder of concerns. ‎

‘This is particularly true as any deal is unlikely to see the EU make any material concessions, as Barnier also highlighted yesterday when he stressed the importance of the integrity of the single market.’

As the initial impact of Barnier’s comments fade GBP exchange rates look vulnerable to decline unless there are signs of more substantial progress towards a final deal.